Monday, December 05, 2016

It's Up to President-elect Trump to Revive TPP

The Tran-Pacific Partnership (TPP), a trade agreement between the United States and 11 other Pacific Rim countries, seemingly is dead, at least for now. It will not be approved by the current Congress. Therefore, it is up to President-elect Donald Trump to revive it during his Administration.
It’s true that President-elect Trump has said that TPP is a “disaster” and he has declared that he will withdraw from the agreement on his first day in office. But other than a few bullet points on his website, the President-elect has never publicly explained why he does not like this particular trade deal, which looks to be a win for entrepreneurs, creators, consumers, and the global economy.
As I discussed in a June 2016 blog, TPP would expand global trade by eliminating roughly 18,000 tariffs that member countries have imposed on imports from the United States, lifting millions of people out of poverty around the world. By removing these trade barriers imposed by foreign countries and others imposed by the United States, TPP would allow consumers and entrepreneurs in all member countries to enjoy more economic activity and lower prices than what the status quo offers.
From an intellectual property (IP) perspective, TPP appears to require adherence to strong protections of IP rights in member countries. This would help artists and entrepreneurs around the globe to earn a return on their creative works and the labor that makes them possible. According to a September 2016 report by the Department of Commerce and the Patent and Trademark Office, in 2014, 45 million jobs (or 30% of the jobs in the U.S. economy) either directly or indirectly were generated by IP-intensive industries. In the same year, IP-intensive industries added $6.6 trillion of economic activity, which is roughly 38% of GDP.
TPP addresses all aspects of IP, including copyright, patents, trade secrets, and trademarks. The IP chapter of TPP aims to do the following:
  • Improves strong and balanced protection of rights and enforcement of laws;
  • Bolsters incentives for the development of, and trade related to, IP-intensive products;
  • Addresses common threats, including piracy, counterfeiting, and other related infringements, as well as misappropriation (including cyber theft) of trade secrets;
  • Promotes transparent, efficient, and fair regulatory systems, including for patent and trademark application and registration;
  • Promotes development of and access to innovative and generic medicines;
  • Facilitates legitimate digital trade, including in creative content; and
  • Prevents the spread of overly-restrictive geographical indication policies, including by safeguarding the rights of prior trademark owners and rules clarifying the use of generic terms.
Establishing strong IP safeguards among countries in the Pacific Rim would diminish theft of American IP, which totals $320 billion annually. U.S leadership regarding strong IP rights protections will incentivize more investment, innovation, and economic growth at home and abroad.

A 2014 report from NDP Analytics estimates that TPP would increase U.S. exports by $26 billion, U.S. GDP by $11 billion, and American jobs by 48,000 with roughly two-thirds of these benefits coming from IP-intensive industries. This increase in U.S. exports would have direct spillover effects for the other 11 member countries, leading to an estimated $6.4 billion increase in GDP and 68,240 additional jobs. Of course, these figures do not include the increases in economic activity and job creation that will occur among member countries nor do they include the increases in U.S. imports.
Additional economic activity and development within member countries would not be the only benefit flowing from a stronger IP framework; mutual gains from trade are much higher with transactions that contain strong protections of IP rights rather than weak protections. Therefore, member countries which currently have weak IP protections according to the Chamber of Commerce’s Global IP Center International Index, such as Peru, Chile, and Mexico, will incentivize creation and innovation within their own countries. And also, other developing economies, which trade with TPP countries, will recognize the gains from trade and be encouraged to adopt similar IP rights protections.
Gains from trade are mutually beneficial but not necessarily equal. If TPP is adopted, the United States would benefit from the positive externality of robust IP rights protections in other countries and from lower trade barriers with countries in the Pacific Rim. When more countries around the world have strong IP rights protections, American creators and entrepreneurs have a greater incentive to innovate because their creations are less likely to be stolen overseas. However, developing countries, which, on the whole, would substantially upgrade their IP rights protections with the adoption of TPP, likely will enjoy an even higher marginal benefit than the U.S. because their economies have not experienced as much innovation as countries with strong IP rights protections in place. In general, and all else equal, developing countries grow faster than developed countries when there is an expansion in global trade. 
Perhaps, the President-elect views the trade agreement as problematic because he considers global trade as an “us versus them” phenomenon. In other words, he may consider global trade as a zero-sum game, when, in actuality, it is a variable-sum game. For example, even if Vietnam benefits more from TPP than the United States, this does not mean the U.S. loses. Both countries are better off, even if the marginal benefit might be greater for one country over another.
President-elect Trump should revive TPP during his administration. It is vital that this trade agreement be adopted to encourage the creation of jobs and to foster greater innovation and investment in the United States and in the Pacific Rim. Mr. Trump’s campaign primarily focused on creating jobs in the United States. TPP is a win for American workers and consumers because it would expand economic activity around the world, increasing American imports and exports.
In 2014, U.S. imports and exports from IP-intensive industries were valued at $1.4 trillion and $842 billion, respectively. Those values likely would increase if IP rights are enhanced around the world. (NDP Analytics projects that TPP will increase annual U.S. exports by up to $26 billion.)
With the adoption of TPP, President-elect Trump could help spur the economy, which is clearly a top priority. Let’s hope that Mr. Trump changes his mind about TPP.

New FCC Report Shows Increased Broadband Quality for Consumers

On December 1, 2016, the FCC published its sixth Measuring Broadband America report, which examines the speeds, latency, and consumer trends of fixed broadband services nationwide. Here are some of the key findings from the report:
Significant growth in broadband speeds available to consumers, though the results are not uniform across technologies. The median download speed, averaged across all participating ISPs, has almost quadrupled, from approximately 10 Mbps in March 2011, to approximately 39 Mbps in September 2015. Compared to last year’s value of 32 Mbps, this year’s median download speed was an increase of approximately 22%.  
Since the first Measuring Broadband America report in August 2011, the average annual increase in median download speeds by technology is 47% for cable, and 14% for fiber, while popular DSL speeds have remained largely the same. (See the chart below for the growth in the median download speed over the past five years.)
Actual speeds experienced by most consumers meet or exceed advertised speeds. All ISPs using cable, fiber or satellite technologies advertise speeds for services that, on average, are close to the actual speeds experienced by their subscribers. Fixed cable and fiber broadband customers experienced speeds that were 100% or better than advertised.
The chart below shows the ratio of weighted median speed to advertised speed for a number of broadband providers. Of the 16 providers included in the sample, nine of them delivered actual download and upload speeds that are greater than the advertised speeds.
Consumers with access to faster services continue to migrate to higher service tiers. Data shows that panelists subscribed in September 2014 to service tiers with advertised download speeds between 15 Mbps to 50 Mbps are the most likely to have migrated towards higher service tiers. In contrast, among panelists subscribed in September 2014 to service tiers with advertised download speeds of less than 15 Mbps – offered mostly by DSL services – only a few percent migrated within the following year to a service tier with a higher download speed.
Latency and packet loss vary by technologies. Consumers generally experienced low latency – the time it takes for a data packet to travel from one point to another in a network – on DSL, cable and fiber systems. Higher latency in satellite services may affect the perceived quality of highly interactive applications such as VoIP calls, video chat and multiplayer games. Consumers generally experienced low packet loss – the percentage of packets that are sent by the source but not received by the destination – on cable, satellite and fiber systems.
The results of the FCC’s sixth Measuring Broadband America report show that the quality of broadband is increasing throughout the United States. Despite regulatory barriers that may have slowed investment and innovation in broadband technologies, the broadband market remains dynamically competitive and consumers are benefiting from faster speeds and more reliable connections.

Thursday, December 01, 2016

CenturyLink Will Become More Heavily Business Focused

Here's an interesting take in Telecompetitor on CenturyLink's acquisition of Level 3 and how the merger will transform CenturyLink's business. CenturyLink would become the most heavily business-focused service provider of the five largest national telecom carriers.

Monday, November 28, 2016

DirecTV Now Will Connect Cord-Cutters to Live Programming

On November 28, 2016, The Wall Street Journal featured an article about AT&T's new DirecTV Now [Subscription Required], an over-the-top (OTT) video service with more than 100 live streaming television channels for $35 a month. Featuring content from some of the biggest companies in the world, including 21st Century Fox, Walt Disney Company, and Time Warner, DirecTV Now will be an OTT competitor to traditional pay-TV providers. DirecTV Now will allow cord-cutters to access live programing and likely will incentivize other pay-TV competitors to develop similar services to account for an increasing number of cord-cutters. 

Friday, November 25, 2016

Mark Zuckerberg on Facebook and Fake News

So-called “fake news” has been in the news recently – whether in the “real news” or more supposed “fake news” sites – I’ll leave to you to decide. On November 19, Facebook’s CEO Mark Zuckerberg posted his views on the subject. I commend Mr. Zuckerberg’s thoughtful post as well worth a read. 
Right now, in the post-election environment, passions on behalf of some are running high, too high in some quarters. And when passions run high, oftentimes there are pleas for action, even when the solutions offered might be worse than the supposed ills. 
Read Mr. Zuckerberg’s entire post, but here is a brief excerpt that makes a lot of sense:
“The problems here are complex, both technically and philosophically. We believe in giving people a voice, which means erring on the side of letting people share what they want whenever possible. We need to be careful not to discourage sharing of opinions or to mistakenly restrict accurate content. We do not want to be arbiters of truth ourselves, but instead rely on our community and trusted third parties.” 
Mr. Zuckerberg goes on to say that “the percentage of misinformation is relatively small.” On this point, it’s worth taking a look at A. Barton Hinkle’s November 23 post at Reason, “The Fake News Epidemic of Fake News.” Mr. Hinkle contends there are at least two problems with the recent Buzzfeed story upon which so much of the buzz surrounding “fake news” rests: “First, the epidemic of fake news is overstated. Second, fake news is far from new.” 
In any event, in his post, Mr. Zuckerberg commendably outlines some measures Facebook itself is considering to address the fake news issue. Several look promising, at least in theory. You can decide for yourself. 
But the main point is that to the extent “fake news” is a serious problem at all, it should be left to the platforms themselves – and interested private third parties – to address it, not the government. 

As a matter of sound policy, the government should stay out of the business of evaluating the truthfulness of news, except, for example, in rare instances involving public health and safety. And as a matter of law, the First Amendment’s free speech clause demands no less.

Wednesday, November 23, 2016

Thanksgiving Day 2016

Since I founded the Free State Foundation in 2006, I’ve tried to pen special holiday messages to our friends and supporters on Memorial Day, Independence Day, and Thanksgiving Day. As we enter our second decade, I don’t plan on stopping the tradition any time soon. So, here’s hoping you don’t mind.
Of course, there are many more holidays on the calendar from which to choose if I were so inclined. But to me, Independence Day, Memorial Day, and Thanksgiving are uniquely American holidays. I am unabashed in my belief that America is a unique nation, blessed with a unique form of government bequeathed to us by our Founders.
That the Founders were not, by any means, perfect men does not mean that they lacked the foresight and wisdom to bequeath to us the means by which “to form a more perfect Union.”
From its inception, the Free State Foundation has proclaimed as its mission the promotion of free market, limited government, and rule of law principles. In that vein, we have focused on eliminating unnecessary regulatory mandates, protecting individual and economic liberty, including property rights, and making government more effective, efficient, and accountable.
On this Thanksgiving, as always, I’m grateful that we live in a free country in which we can freely advocate for the adoption of laws and policies that, in our view, comport with our principles. And I’m equally grateful that you are able to freely advocate for yours. In other words, while we at the Free State Foundation advocate, vigorously I hope, for the adoption of free market and limited government policies, you may, if you wish, advocate for the adoption of anti-free market and anti-limited government policies.
But here’s what is most important: All of us must advocate – that is, exercise our First Amendment rights – consistent with the rule of law and within the constraints of our Constitution. That is what ultimately binds us together as Americans. On adherence to the rule of law, there should not – must not! – be disagreement, or we will lose that which makes America exceptional.
This year has been one in which my own family has had to confront personal challenges, and I am sure the same is true for some of you as well. But we know we have many blessings to count, and for that we are thankful. And I certainly hope the same is true for you.
So, in the spirit of a uniquely American holiday, and with much for which to be grateful, on behalf of those of us at the Free State Foundation, I wish you a Happy Thanksgiving, and a meaningful one too.

Friday, November 18, 2016

Midnight Rules Relief Act

The House of Representatives just passed the Midnight Rules Relief Act. See Broadcasting & Cable's John Eggerton's report here.
This is an excerpt from John's story:
"But the House on Thursday passed (240 to 179) a bill—H.R. 5982, the Midnight Rules Relief Act—to backstop those warnings to all federal agencies about 11th-hour votes, on or off a public meeting. The bill can't get a Senate vote until at least Nov. 28 since the Senate is not holding any business sessions until that date given the Thanksgiving holiday next week.
The bill 'amends the Congressional Review Act to allow Congress to consider a joint resolution to disapprove multiple regulations that federal agencies have submitted for congressional review within the last 60 legislative days of a session of Congress during the final year of a President's term. Congress may disapprove a group of such regulations together (i.e., 'en bloc') instead of the current procedure of considering only one regulation at a time.'"
The bill is unlikely to get through the Senate, but it is an important indication of the House of Representatives' seriousness regarding regulatory reform. 

Wednesday, November 16, 2016

Congresswoman Marsha Blackburn to Speak at FSF Tenth Anniversary Celebration Luncheon

Congresswoman Marsha Blackburn, Vice Chair of the House Energy and Commerce Committee, and Republican Deputy Whip, will help celebrate the Free State Foundation’s Tenth Anniversary on Wednesday, December 7, 2016, at the National Press Club.
Congresswoman Blackburn joins FCC Commissioners Ajit Pai and Michael O'Rielly, and Daniel Lyons, Professor at Boston College Law School and a member of FSF's Board of Academic Advisors, who will reflect on the direction of law and policy over the Free State Foundation's first ten years and look at the challenges ahead.
A flyer with details is here. Register here!